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tv   Today in Washington  CSPAN  December 20, 2011 2:00am-6:00am EST

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and it is the only meeting where thisis material the question was discussed in anely detail and as i have said exactly what waswas presented to me add that time which was sufficient tohor authorize to give them theu authority to increase the offer but no more. >> that specificio information and that would be $0.250 in. >> also the existence of evidence that. >> that is important dna being counsel's opinion yes
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they would lose the case and t is susan amount that was t said period bonn.or >> what did o rash now? finn mac guide to zero ruth hef five days to think the range that was given letere spin if there is a strong recommendation that should be pursued. >> ai's him when both day estimate we will see you in mccourt. he said 25,000 was a close at this hat presumably come
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and must have been used tori authorize. but i believe the authorization of mr.crone was much, much lower with respect to the legal settlement which is 10,000 pounds. it is important to try to be to fair, they had already attempted to settle the case at a number of lovell's fifth four they came to me at the yes they have lesser amounts if you wear green two or the higherleun amounts for with a had a given up a sit-in revelation this
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demand but there was the 150,000 i did not increase as 300,000 and that was not at myr. authorization nor do i have been a record i have looked quite hard to find any records of the other half authorization are other executives could have done in thus cfo was no record of any of that. . .
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>> i still cannot distinguish which is same question which is on what basis did you give the authorities, who gave the 500,000 pounds cap to julia pike? >> certainly after june 10 meeting a range was discussed, and that was, and that would be capped at mr. crone want to give to mr. pike, that was their i had a great certainly with them within a range as we discussed something about 500,000 pounds when you include costs that they had the authority to go out and try to settle it which is their advice they had given me. >> had you given them a cap? when. >> i think the point here is the damages number plus than the costs of both sides to litigate it. and i don't recall a discussion of cap on damages, although it would have been not, it would've
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been quite, quite normal to say go and have, you know, go and have a go at this number. but i don't, i don't recall the. >> did you get a cap or not? >> certainly i didn't say they could sell at any number. i would've been absolutely clear about that. they gave me a range within that range i said they could go in, you know, pursue the settlement spent did they come back to see her authorization when they got a figure upon which a been agreed and then say let's go with that? >> they had authority to go and settle the case within a range they have presented to me. whether or not they came back with the sun, there was confirmation of what had happened or had it ago and in some point in the future, there were no subsequent meetings with two of them on the subject but they may have called me or had a confirmatory discussion that went. >> the problem i have, it's all very cavalier to me. and you know, very cavalier with
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money. given that your organization has been so successful i can't believe you have been so successful by being so cavalier with whether you pay off somebody, an employee is sent to prison, you give them half a million pounds without a blink of the night. nor the company into disrepute. you agreed to settle cases with no real cap put in place, some sort of a ballpark people that people are left to go along with. you think you have counsel's opinion but you don't have to even see the opinion what comes can be when it's a substantial amount. the problem i have is you seem to characterize your sort of defense for this sort of cavalier approach. well, this is "news of the world." this is half our business. i don't know how big -- spent wal-mart spirit exactly.
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i'm pretty safe to say wal-mart is bigger than news corporation. i think wal-mart is passionate absolutely. i know the chief operating officer which may be a small part of wal-mart, but a relatively small part of wal-mart, i guarantee that if somebody had gone to him and said here, we got a problem, a legal case is going to cost us in the region of half a million pounds, in the chief operating officer that i've ever dealt with in my entire life with apricot say, let me have a look at that. i find it incredible, absolutely incredible that you didn't say how much? let me have a look at it. i can't even begin to believe that that is a cause of action that any chief executive, chief operating officer could possibly take with so much of a companies money and reputation at stake. >> mr. davies, i think it's
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important to know, and i've testified to this fact and i try to describe this to you in some detail, just the situation that we had here was one where assurances were given, very clearly, rather a description was given very clearly a senior legal counsel that the case would be lost. and a description of why it would be lost with respect to the linkage of these voicemail, it was clear it was a losing case. it was an amount of money that was substantial, you're absolutely right. i was assured that within a range leading catholic convert this is where it would settle at or could settle at, and within that range i authorize these people, mr. crone and mr. myler to go and negotiate that. i think, you know, the way that the company has always operated is to really rely on executives directly responsible for a unit
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of the business, paper, et cetera to really be, to go and do the things they need to do under the assumption they would be appropriate, although they would be question from time to time and come to senior management with issues. i was given sufficient information to authorized that settled. i was not given no information. i was given sufficient information and asked the question, is there a legal counsel opinion? what do they say? they say it's within this range, it's reasonable that it was a reasonable decision to take to settle that case, to agree with their advice. and take no further action because no other evidence or none of these other issues we have discussed today came to light during that conversation or at that meeting spent but what source of level with the settlement would have been or the advice of the council have to been for you to want to say let me have a look at that?
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we trust our executives to make decisions and go, maybe a few chunky questions here and there. if that's the case why was tom crone only had a 10,000-pound limit. he just might happen to say settle up to half a million pounds, and it doesn't strike me as -- [inaudible] we will get a new authority to settle only to 10,000. doesn't make sense. it's a mismatch. this strict 10,000-pound authorization that tom crone has spent mister davies, there's a contrast here between controls and financial controls to make sure things are hopefully recorded properly, authorize probably and so on and so forth. and if they're not there dealt with in the right way. following the recommendation of experience council. this is a strong recommendation
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of very experienced number of years, some 20 plus years as counsel, the editor a new editor who had come in, a fresh look at all these issues i had assumed, and they made a very, very strong recommendation. and i followed it. and i think given, there are two pieces here, if i can try to be helpful. one is the question, decision whether or not to settle or to increase the authority within a range as i recall 500,000 to a million pounds, and all in cost, so and so forth. and then the decision with respect, or the lack of a decision to say are there other things a we should be looking at. and again, sufficient information was given to authorize reasonably them to negotiate within a range, the increase of the summit offers they had already made, but nothing more and nothing to indicate any other action. there are two sets of things to
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consider there. >> what parts of that was the confidentiality of? >> as i testify to you in july, at the meeting of june 10 in 2008, confidentiality as a cost item, if you will, was not discussed and it wasn't my absent at the time confidential i was something that was a line item come if you will, that would increase the cost, so and so forth. it was entirely customarily for certain settlement agreements of this nature to be confidential. it's normal practice in many business passionate many, many businesses, if not all, when faced with certain legal things. as i wrote to you in august, it later became clear to me after my testimony to you in documents that had not been, that i had not been privy to conversations that i was not a part of the indie confidentiality was discussed at cost in that
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settlement. and i wrote to you in august to clarify at that point. i hope that's helpful. [inaudible] do you come have you as a result of this, do you now look at things differently? do you deal with things differently? do have a more hands-on approach with the way you do with things in your company? can you not see that actually this really is pretty lax for someone in your position? >> it is a huge focus to the business, and has been for the last year, to get to the bottom of this issue definitely, to cooperate with the police with respect to their criminal investigations and this committee as well as judicial inquiry, and to the press, politicians, police, that is underway. and and i think crucially as well to learn the lessons from these episodes, to say first of all, how can we improve on the ground government of operating
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companies around the world, including news international? how can we improve transparency with the senior management on a global or regional basis and operating companies in various territories. and we take a number of measures to do that. you ask how. for several at news international, all the operating companies i have a 34 we've instituted a more formal review process. will put an intel board in place. appointed a chief compliance officer full-time round those things. i meet with outside executives of news international order meet with the board. we've had one meeting already with the substantive agenda around these things. the goal is to go through in great detail both legal matters that are facing the company, ongoing and reputation risks, governance risk, compliance and so on.
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just in the last week we have instituted, for example, out of one of these in indy we trained over i think 1000 staff, we trained with respect to compliance and risk. these are things i take very strictly. it's something i have throughout my entire career, clearly the transparency that was achieved around this set of issues wasn't good enough, and something i determined to sort out into something we would very, very strongly in. >> just one question i've got regarding mr. davey's line of questioning. your first meeting, they come to you to ask for authorization to increase what they're offering the doing of what they're offering before they came into the meeting? >> i now know the previous offer they made was 350,000 pounds. but i don't recall the exact amount they discuss with me at
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the time, that i would imagine they would. >> this is your first substantive meeting with people having alone opposition. did you even ask them who gave you authority to authorize 350 or whatever? >> again i don't recall him mentioning the 350. now i know that was an offer made the week before i was abroad. i didn't have that discussion with him at the time. i was more focused on what the total amount would be that this would seldom given the strong advice that the case would be lost. and that was what was focused on spent. [inaudible] >> their authority level did not come up during the conversation. >> would any of the people involved in that chain of operations, john chapman to your knowledge to? to my knowledge, the authorization process was that there was about, mr. crone was
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authorized to make a 10,000 pounds legal some of the mr. myler would've been 50,000 pounds, and other members of the executive committee, the chief operating officer, chief financial officer would've been authorized i believe up to 500,000 pounds. >> did they go through any of those? >> i can find no record of those authorizations being sought or given. and we have looked and tried to find out exactly how that escalation occurred during that period. spirit as far as you are what it really was tom crone and mr. myler show? >> i think very much in the documents given to you, you know, we're very much driving the agenda around the litigation but i think that's also what mr. chapman testified to as well spent i will come to mr. crone and mr. meyerle, but the matter of tom crone, wrote to -- on a saturday which was a very busy day for "news of the world."
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the following tuesday where he is clearly expecting colin myler to the meaning within, which he said he can't be advocacy group are in for a holiday. when did you first see that name of? >> i didn't see that memo at the time. i first saw that memo recently since i gave evidence to you in july spent so that was a private note from tom crone to colin myler, and was not copied to? >> it was not shared with the. >> would you agree, the fact that you can't recall having a meeting, or discussion, certainly colin myler can't recall having a meeting that tom crone expect to happen, writing pretty serious memo, the question as to how these two deal with each other and whether they fall in frank with what they're up to? >> i mean, i couldn't possibly spike lee about all the conversation they might have had with each other but i just don't
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know. [inaudible] people have occasionally refresh their memories, and colin myler has told he has been unable to verify details of the discussion that may or may not have taken place because news of the international have refused them access to the relevant documents, presuming relevant document exist. would you let mr. myler refresh his memory, you would give them access to any guidance he needs surrounding that meeting or otherwise? >> i can tell you that mr., you know, as a matter of, if there's an occasion to review policy around former employees, access to systems, week in review that and i can get back to you on the. i can say that i had gone and looked for records around my own diary with respect to conversations during that period, and i'm happy to provide my calendar to you. there's no record of a
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conversation or meeting on the 27th of may with mr. myler or with anyone else on this matter. and i can provide you with that. those calendar events all the way through. [inaudible] wouldn't you agree with that? >> i think the company around all of these issues can the independent committee for that matter, if there's an occasion to revisit those, certainly i will meet with them. >> in the spirit of transparency? >> very much so. and i'm happy to provide you with my own calendar and notes about the entire period. >> because a peculiar meeting come or not needing? >> i don't think anyone is suggesting it's a meeting. mr. pike recorded know that mr. myler told him of the conversation, so secondhand note
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of the conversation that neither mr. myler nor i recall, neither of us rule out the possibility of a brief conversation on that day, a telephone call or what have you, but it certainly would have been a transeventy because otherwise one of us would have recalled. >> just the way people argue with each other, you're very clear, you talked to go and settle, where as the notes made by julian pike with his conversation of tom crone, quite clear he said he went to think the options and that's not the case. that again raises the question about what these people are telling each other, whether they are being honest with each other if you are telling us the truth spent by the mr. crone and mr. myler both testified to this committee, certainly mr. crone did, that he left that meeting with the understanding that they had the authority to go and settle. the authority they were seeking to increase their offer was something they left that meeting with. i don't know what the note from
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mr. pike is referring to, whether not mr. crone are mr. pike or somebody had to be gone but i just don't know. >> can i just got back a bit about your position, your responsibilities. you took over when -- was. [inaudible] moved over to "the wall street journal." and you were running a international operations for europe and asia at news corp. where you effectively executive chairman of news international? >> i was chairman of his international when he moved to new york to dow jones. and did spend time on the business. and relied on senior manager put in place for some time. it was always the case that the company would appoint full-time ceo to replace mr. hinton. and it took about 18 months to get to that point.
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that was rebekah brooks? >> yes spent in september 2009? >> yes, although effectively i think was announced in the summer of 2000 and she started to play a much bigger role. >> so you were -- >> i think formerly the chairm chairman. >> not executive chairman? >> i don't recall. i may been the executive chairman. >> who was the de facto chief executive of news international before running the show before rebecca was appointed? >> we had an executive group, chief financial officer and then, and i involve the editors more transparency. >> so you were an executive chairman? >> yes. i might have been but effective -- >> can i just come in this
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meeting on the 10th of june, the e-mail in its wide significance was not mentioned the fact that involve "news of the world." when you had this meeting did you ask colin myler, you know who taylor was? >> pardon me? >> did you? >> did you know who gordon taylor was? >> i don't recall if i knew he'd he was beforehand, but mr. myler would have told me spirit did you ask any meeting who the hell is this gordon taylor? >> i don't recall if i asked. i recall being aware of it at the time. what it was prior or maybe where any meaning who mr. taylor was i don't recall spent do you know what he did for a living? >> i was told. as i just said to you to be clear, i don't know if i had a lot of knowledge about mr. taylor's role. >> the one thing that really,
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that really showed us and i think any 10 year old that the "news of the world" line did not stand up with the fact according to was not a member of the royal family or the royal household. so did you not say well he is not royal? >> i think the point here is not so much whether or not i was told gordon taylor was, but really what, you know, when i came to news corporation in 2007, what didn't happen was, i did not receive a briefing on all the matters in 2006, december 2007 i was aware that the editor had resigned over these things, taepodong to jail, one of them was a reporter. the details involving the royal family, that was the royal reporter, those things were not brought to my attention spent you were authorizing a settlement, substantially above sort of damages what you see as
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they were talking about. and you are not even curious -- [inaudible] how can he pakistan's own? -- hack this man's phone? >> the original prosecution and that would not in terms of his being the royal reporter and it was a voicemail interception involving the royal family were not of my mind at the time. i was given a set of information that this was a case, it was an old matter, there was a question of, it was the same person convicted before and so one who'd been working with the "news of the world" with mr. goodman, but mr. goodlatte i don't live was discussed at the meeting. and that there was a piece of evidence that would ensure that the company would lose the case because indeed the interception in question was only half of the company. that was information i was given
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spirit did not occur to you, did you ask? >> i don't believe so. i think it was known at the time that this was a voicemail interception that had already been prosecuted by the police and that the police had said there isn't anything more here. they shut their investigation and successfully prosecute the individuals concerned. >> i have a growly australian accent rattling around in my head at the moment that would take how much more is this person going to cost me question to you think your dad might've asked more questions than you asked for? >> i couldn't begin to speculate. >> and you didn't come it didn't occur to you to sort of ask whether glenn mulcaire -- >> no, it was specifically said to me that he was doing this on behalf of the "news of the world" with respect to this. and that was the relevant, the
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evidence that was described to me. >> it's remarkably curious, are you so curious with all the other businesses you run at news corp.? >> i think it's important to be clear here is that the question, the questions were asked with respect is there evidence, what is the evidence about, is the case going to be lost? i was told the council provide acting within a range that somewhat recommendations were made. it was not as if there wasn't a conversation. it was not certainly a long conversation. in my view it was a settled matter. i was given very, very strong recommendation by senior and experienced legal counsel, and the editor of the "news of the world." i think, unicom had been with the business for some time. and in industry for something. i had no reason to believe, nor was i provide any reason to believe that anything further was a foot in spent entrance of
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the opinion, either didn't occur or clearly didn't seem relevant to you even ask for a copy? >> i interested at the time and he was described to me at the time deleting counsel's opinion was with respect to damages. i was given an answer about the range of damages and what it would take to question with respect to what mr. taylor's requirements were, in terms of what you might want to settle for an have to do that. that was the discussion that was had and it was deemed sufficient. >> we do not at all curious whether they said anything else? >> singh as a told the qc had been passed on damages and it was described to me with a range of damages there were, it didn't, it didn't occur to me to probe further. >> so you didn't even ask how long is this aqc's opinion, if it's a cute -- a few pages long? >> it was described to me that the opinion was made that it was
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with respect to damages and that there wasn't other things that but it didn't seem necessary for me to ask for a copy of it nor was a forthcoming. >> do you know how widely the qc opinion was to get a to get a? >> i did not know. >> do you know what it was a good are asked by rebekah brooks? >> i do not know. >> the e-mail was published of far, far earlier than our report in february 2010, published to shortly after the 14th of july, 2009, when it was disclosed to us. >> if it was in the newspaper allegation in 2009. >> it was given to this committee by nick davis, the journalist. >> do you recall when the guarding produce that story and then a week later they came, the documents were published following our session, do you remember where you are?
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>> when a newspaper allegation was made i was in the united states. i was in idaho at a business conference. >> where you've been at the time based in london? >> yes, and i return to the u.k. the following week. >> did you ask for anything? >> my reaction was to understand whether or not it was true, that there were further allegations. and i asked, i received a telephone call from the u.k. i received a copy of the article and the allegations made, was asked is this true. went back to the news of the will to say, because they been, mr. koh and mr. myler had answered the settlement that the answer came back very strongly that investigations have been made, inquiries have been made, previous investigations have been made and are, had uncovered no new evidence at all. the same assurances that you
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received in 2090 and, indeed, it was only well before i return to london, was only 24 hours after the allegations in december 2002009 emerged that the metropolitan police issued a statement saying that there was no new evidence and this was a matter of very serious investigation by a series of detectives and is nothing new to investigate. >> so when the story was published, but, you know, was published, you didn't even think about saying well, i'd better have a look at this, these transcripts that were mentioned to me previously? i'd like to have a look at the qc's opinion? >> the transcripts themselves a? >> the e-mail. >> as you said, there wasn't much in the. i think there was, a facsimile of our something like that. sort of a redacted one piece. >> even in the middle of 2009,
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the executive chairman of news international, you are possibly the only person in london who still thinks that there's one rogue reporter and one private detective? >> as you are aware, mr. fairley, within 24 hours, the police issued a statement, and recall that the e-mail came from the police in the civil trial disclosure process, so the issued a statement saying there was no new evidence. >> bodmin spent but they said that the police had for longer than that because it had come from them. that there was no new evidence, that there was nothing new to investigate. secondly, the executives responsible were very, very clear that thorough investigation had been done, and the company as i said earlier on in state testimony, the company relied for too long on assurances about thoroughness and scope and completeness of those investigations, as was the
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assurances of the police. >> let's move back to news international and reaction to some of these events. and july 2009 you said too quick and too aggressive in defense and when they talk about a thorough investigation, didn't happen because their investigation didn't even, honor the qc's opinion, which is pretty damned. cleanup you take responsibility as executive chairman for that failing. spent i think as i said, the company come and they do share responsibility as an executive, senior executive in the company, relied for too long on very strong assurances from both internally inside the company around the quality, scope and authority of investigate have been made on an ongoing basis as was the 2006 in 2007, and also
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on the assurances from outside the company from the police who presume that more information and for the last word if you will on the investigations that they carried out and successfully lead to successful prosecution in 2006. and i have said that the company relied on those things to like and i have said i'm sorry for the. it's something that we're determined in how we operate a business going forward that we make sure these things don't happen again. >> -- [inaudible] pretty much repeated news international statements and said there was no evidence that "news of the world" instructed third parties or others to access voicemails of individuals. you except now that colin myler, the editor, produced that editorial and the lead manager, tom crone believed that statement in the paper to be false?
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>> what i do know now is that in 2008 they had access to the leading counsel's opinion and other things. what conclusions they drew from that, and there are other things, is a matter that would be speculation if i got into that. and i think you have spent a lot of time with mr. myler and mr. crone, and i think also a matter for this committee. >> similar statements were made about our committee report in 2010. could i just very, very quickly deal with mr. crone and mr. myler who have taken issue with you, clearly mr. pike has already told us he knew that people from news were not telling principally mr. myler and mr. crone as soon as they open their mouth. can't i just add something else into the mix here? as far as what mr. crone and
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mr. myler told us. originally, mr. crone told us as far as neville thurlbeck. i questioned neville thurlbeck then and i questioned the same subject at his position is he is never seen the e-mail nor had any knowledge of it. .. >> i think that's -- with respect, i think that's a question for this committee to judge the evidence given to it.
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i have been very clear that i believe this committee was given evidence with executives either without full possession of until facts or that was not as complete as it should have been, and i'm sorry for that, and the company is. this is -- it's not good, and it's something that i'm determined to make sure doesn't happen again. um, it is something, you know, the only thing i can speak to with respect to the evidence, and i made a statement to this effect, is, that, you know, assertions made about my knowledge were wrong. >> mr. krone also said when he came back for the first time, that's you, realized that news of the world was involved, and on that basis he authorized a settlement. he couldn't have been more cat goeric. again, how does that reflect on -- >> could you repeat that piece -- >> yes, came back to the committee to say of the settlement organization for the first time he -- that's you -- realized "news of the world "was
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involved, and that involvement involved people beyond clive good match. on that basis, he authorized set m settlement. >> there's a lot of might have known and should have known and this and that. what never happened is mr. crone and mr. myler showing me the relevant evidence, explaining the relevance or talking about wider spread criminality, the queen's council opinions, all of these things. that simply did not happen. and people can suppose that i might have understood, but at the end of the day, those things were not provided to me, and as i said earlier, i was given sufficient information and only sufficient information to authorize the increase of a settlement offer that mr. crone and mr. myler had already been eagerly increasing before it came across my desk, and that's what i received. i received nothing more.
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>> i'm just drawing a conclusion, so just to be absolutely clear, if mr. myler's telling the truth, you're not telling the truth. if you're telling the truth, they're not telling the truth. >> mr. farrelly, it's quite interesting. there is a lot of supposition in it. i would have known, they understood me to know, all of those sorts of things. what they never did was clearly tell you that they showed me those e-mails. they never clearly told you that they discussed with me the real significance of the queen's council opinion. they never went that far. it was very cob fusing and muddled -- confusing and muddled, to be honest with you. but i think it's for this committee to decide the quality of the evidence and the testimony that it's receiving, not for me to prejudge that. >> right. my final question is given all the evidence that was clearly
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there within news of the world, given the close your and given the loss, do you think you handled this competently? >> um, i spent a bit of time, quite a bit of time refleblghting on my own decisions, my own behavior and the company's behavior more generally in this, in this matter. for the time where i had direct responsibility, um, as you put it executive chairman, i think it might have been executive chairman in title, we don't focus that much on titles, but for that time in 2008 and leading up to the middle of 2009, i think with respect to the settlement, for example, i think i behaved reasonably given the information that i had. i do think the company -- and i share in the responsibility for this, and i'm sorry for it, the company took too long to come to grips with these issues with
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understanding what had been done and what had not been done in 2006 and '7 with respect to its own investigations. and understanding how to dispassionately look at what were perceived as attacks as opposed to legitimate criticism from the outside. and i think part of showing that responsibility and part of taking responsibility is also making sure that those things don't happen again and making sure that the quality of the business that i see with my colleagues everywhere around the world from my colleagues in hong kong to milan to munich and new york and california just to name a few, a huge and great organization that clearly in this instance has failed to come to grips with something important. and part of taking responsibility is making sure to sort that out. >> yes or no, do you think the whole, this whole saga and your evident lack of curiosity in
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asking questions that were screaming to be asked show you to be competent or incompetent? yes or no? >> no, i don't think it shows me to be incompetent. and i don't think, for the record, that i would characterize it the same way you just did. >> can i turn to -- [inaudible] >> i apologize, but i'm going to have to leave the committee meeting after my last question. we have two from the same age, i think, and i have to go back home and pick them up. >> oh, good. good luck. >> when your father appeared before us in july, he promised to take under review news corporation's properties all around the world. to your knowledge, how is that review coming? >> there are a number of activities underway. they are, some of them, discreet to different regions, so the newspaper businesses in the n if australia, for example, have undergone a review of editorial practices and so on and so
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forth. as you know, i think, and as we've informed this committee, in the u.k. the company has set up an independent management and standards committee reporting to the independent directors of the board, and that review of editorial practices proactively and to all of the titles, not just the "news of the world," is well upside way and a lot of detail. and i hope that's concluded early in the new year, although it's being managed separately to the business. as i mentioned earlier from a corporate perspective and from a governance and compliance perspective, we're making the changes we think that will, hopefully, insure greater transparency around things if they do go wrong, but also insure the disciplines and really the prioritization of some of the matters around transparency up and down the chain of the business. so i feel they're coming along well. i don't have perfect knowledge of the management and standards
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committee independent review, nor should i as an executive involved in this business. i think one of the real lessons learned here as well is to avoid allowing, for lack of -- [inaudible] allowing the newsroom to investigate itself, and i think having ip dependent eyes and having a stronger and more proactive, um, to the corporate presence when things are raised or when an alarm goes off, i think it's something that is one of the key lessons that we've learned. >> thank you. in advance of the australian government's inquire ri into media standards over there, is the resignation of john hartigan yesterday, to your knowledge, related either to phone hacking or to any unethical practices -- >> no, i'm not involved in the australian part of the business, but i would think certainly not glflt okay. to your knowledge, how many
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other international newspapers have been hacking e-mails or phones other than "news of the world"? >> the management standards committee, the investigation is underway, and i really don't want to prejudge the outcome of that investigation. it's an important investigation, and if there is evidence that's found, there will be matters of criminal informations as well -- investigations as well. as you know, a journalist at "the sun" was arrested recently which is a matter of great concern, but i also think it shows how seriously we're taking these issues, and the company is working, you know, determinedly to provide whatever information there is to the police in those instances. but in that matter, that is the matter of a criminal investigation, and i shouldn't talk too much more about it. >> i wonder if you could, i might ask if it'd be in order for you not to say which journalist, but which paper if
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news international, to your knowledge, has been involved this -- because that wouldn't prejudice -- >> at this point, i have no knowledge of any of the other papers being involved in the hacking of phones, but i don't want to prejudge the management and standards committee's work, nor have i seen all the work their doing. >> okay. i asked you if you were aware of the allegations that phone hacking had been hacked on american soil, and you said you were not aware of any such allegations. since that time mr. martin lewis, the hour for the victims, has told us he is representing victims who were hacked by news international journalists on american soil. what do you know of that matter today? >> um, i know that it's a matter of activity for the management and standards committee, they are looking into that and cooperating with the police here and the investigations that are ongoing as well as with any matters in any other
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jurisdiction with respect to activities at the u.k. newspapers, but i have no knowledge of the veracity or substantiveness of those allegations. >> so you still have no knowledge, you stand by your earlier testimony also that you have no knowledge that 9/11 victims or their families were hacked by news corporation? >> that's correct, and i think a loot of investigation and work has been done on that summit, and so far there's nothing to say that confirms it, as i understand it. >> so far you were coming up empty. it would seem that, at best, mr. tom crohn misled this committee in his most recent evidence. in answering questions from my colleague, tom watson, the exchange went as followed: mr. watson, did you arrange for the phone hacking victims to be monitored by -- >> mr. crone, no. mr. watson, have you ever
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received a commissioned report from civil case lawyers that involved private information? mr. crone, let me just think about that last question. i may have litigation, certainly not in the last few years, but a long time ago maybe i might well have used, i probably did, in fact, use private investigators. is it not, in fact, the case, though, that many crone instructed news international's solicitors as recently as may 2010 to look into the personal relationship that may or may not have existed between mr. lewis and the lawyer, charlotte harris, also representing victims of phone hacking? >> i can say that, um, mr.crone and another news of the world employee at the time did engage certain private investigators. the details around it i'm not sure as you describe it, but to surveil plaintiffs' lawyers, and i want to say for the record it
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is appalling, it is something i would never condone, and the company should never condone, and it's just unacceptable. >> when did you discover the lawyers of plaintiffs had been put under surveillance? >> very recently. the last few weeks. and i think it's important to say that was absolutely not a corporate activity that was condoned, and it's absolutely not appropriate, and mr. crone and the other person did not do that with any authority or knowledge by me, and i would never con tone that behavior. >> does your internal review of the record suggest that mr. crone authorized that surveillance on victims' lawyers? >> there was surveillance that was done by mr. crone and another executive at "news of the world," and which private investigator and what bits between them i don't know, but they were involved in that. >> are you aware that mr. lewis' family was trailed by private
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investigators including his 14-year-old daughter, and would you agree with me that that is completely dispick bl and has absolutely no place in the practices of -- >> i totally agree with you. if it's the case, as i just said, the whole affair is just not acceptable. >> are you aware that private investigators investigated my colleague, tom watson, and other members of this standing committee and the predeaccesser standing committee during the time they were making their investigations into your company? >> i am aware of the case of surveilling mr. wattton, and under the circumstances i apologize unreservedly for that. it's not something i had knowledge of, and it's not something i think that has a place in the way we operate. i think it's important to note that certain surveillance of prominent figures in investigative journalism is
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acceptable, but in this case it's absolutely not acceptable, you have my apology on behalf of the company even though it is something i didn't condone, wouldn't condone and don't agree with. >> i'm sure mr. watson will have some follow-up questions on that later. but can i put it to you, mr. murdoch, that it seems every month if one is following the hacking scandal here in the united kingdom, there's revelations about unethical behavior from news international executives, the latest being the scandalous revelation of surveillance on the lawyers of victims, on the families of lawyers of victims and on members of the select committee investigating the company. you've spoken repeatedly here today and made reference to the review of practices in news international about the need to clean up your act, how proactive the company is trying to be. would you agree that it would be better for news corporation to
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get out in the open every unethical practice that is yet to come to light and, therefore, avoid the drip, drip, drip of incredibly damaging revelations which seem to come out week after week, month after month in relation to this scandal? >> i think, um, i hi it's important to note that much of the disclosure around, um, these activities around police payments, around phone hacking, um, really started to come out as we came to grips with this, and much of the disclosure has actually been disclosure by news corporation and news international first of all with respect to the initial disclosure around a journalist who's since been arrested in january of this year that led to the restarting of the police investigation into the news of the world and into the phone hacking pieces with the disclosure of sufficient evidence that we thought the police should open an investigation into police payments as well. that was something that was there that we didn't know about previously, and when it came to
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light, we acted very, very quickly. and i think since the end of 2010 the company as it has found things out and discovered the extent of what has been isn'ted of happening -- is suspected of happening, we've sought to be as transparent as a company can be. and, certainly, that is the posture of the business, of the executives of the business, of the management and standards committee and at the board level of news corporation that to the extent that we can be as transparent in as timely a way as possible as to any behavior that is unacceptable, um, or illegal, that, um, we are seeking to deal with it. and we're dealing with that with full cooperation with the police investigations that are ongoing and with being as transparent as we can given that there are criminal investigations ongoing and judicial inquiry with any other inquiries that come through.
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>> so just to be completely clear, obviously, you will need to clear all this with the police so that you don't prejudice ongoing criminal investigations, but with those matters which the police allow you to release, as the leader of the company, mr. murdoch, will you guarantee to this committee that you will publicize every nefarious practice that has happened in your company and allow it to be exposed in other media outlets? will you not come forward and admit wrongdoing where you have evidence of it and where such a mission would not prejudice the police investigation? >> i think, first of all, i just want to be very, very clear about the corporate governance structure we've set up recently around these matters, that the disclosure of information both alongside with the police, to the police is something that is a matter of utmost importance to the management and standards committee, and the independent management and standards committee is responsible for the information and disclosure around, um, judicial inquire
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ris, new press practices, so on and so forth. it's my responsibility to be as transparent as possible which is why we asked in april of this year when the company admitted responsibility to wider spread phone hacking set up compensation funds, apologized unreservedly to victims of those voicemail interceptions. we've asked repeatedly for information to come forward that can help us get to the bottom of this to underscore the issue and move forward in a way that is as transparticipant and appropriate as possible. >> when mr. myler appeared before our committee last, i put it to mr. crone then that his credibility had been dadged. it's also going to be further damaged by the revelation he said he did not authorize surveillance on the victims' families and lawyers when
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clearly he did as recently as may of 2010. since your answer to me shows that news international did know that tom crone had authorized this surveillance, why did you not write to the committee to alert us the evidence given by mr. crone in september was not true? >> my understanding that this information came to news international's attention very, very recently, in the last few days or weeks, and it was something that was not known to us and confirmed, is my understand. >> so you would have done if you knew we had been misled, you would have supplied that to the committee? >> i'd have to -- i don't know exactly when ohs in the company became aware of it or our legal counsel and so on, but again, you know, those are the matters to december close before this committee i've tried to be as complete as i can in sending you documents and things that we've understood and found out since my last system. >> i'm sure you would agree that only news corporation can clear
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up this matter. i wish you luck in pursuing your ethical review of the company. thank you. >> i think given the line of questioning, louise has allowed tom to come in. >> be aware that the convicted private investigator -- [inaudible] prince william original inquiry, and this week we found out that the private investigator derek webb taunted prince william. you will probably note that the private investigator jonathan rees targeted these one friend of prince william in 2006, is that right? >> i wasn't aware of that particular piece, but i may have been, i don't recall. >> i know that because i've got an invoice from news international's fly company limited from jonathan rees regarding that. could i ask that you check out your company e-mails and let us know when jonathan rees was contracted to work for the company when he came out of
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prison in 2005, how long he worked for the company, what he did and who appointed him? >> i don't want see that there's any reason why we couldn't share that. i think it's been shown that he worked for a number of news organizations including news international. >> he worked for a number of news organizations in the late '90s, and then he went to prison for a serious crime. he got a seven-year sentence. when he left prison, he was then contracted to work for what we now know is news international supply company limited and did a number of work for the company. and if you could check the -- >> absolutely. if you provide us with that, we can check that and come back to you. >> are you aware of any other private investigators that taunted prince william? >> i'm not aware of any other private investigators. >> [inaudible] >> it's the first time i've heard that, so -- [inaudible conversations] >> and alex layton. >> if you'd like, mr. watson,
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perhaps you could write to us and we could go through all of that -- >> i'd like, given that we're talking about private investigators, i would like to ask you now. could you, also, examine the activities of the private investigator barry -- [inaudible] >> i'm not aware of the individual identities of private investigators were used. perhaps, mr. watson, it'd be helpful to just clarify one of the things the company is doing around this. the use of private investigators clearly has been, i think, in the industry and by "news of the world" too widespread, and i just apologize to you and to the other members of the previous committee as it was described to me for what was inappropriate. it seems to me. one of the key changes we put in place over the last year is that the use of private investigators in particular is severely restricted by the journalists at news international and, in fact, no private investigator, um, under our new guidelines and new
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rules around this can be, um, hired. or contracted by a newspaper without the editor going to the chief executive of the company for approval such that the use of these private investigators doesn't get out of happened and is only finish out of hand and is only in the extremist for appropriate public interest purposes. >> well, under the circumstances, mr. murdoch, i'd like to say that's a great relief to me. >> well, i'm glad. [laughter] [inaudible conversations] >> are you aware of the serious organized crime agency investigation code named operation millipede? >> operation -- no, i'm not aware of that. >> did you -- i won't go there, don't worry, i'm just asking if he was aware. can you let me know whether the company admitted liability to e-mail hacks during any of for settled civil cases? i'm thinking of taylor or clifford. >> i don't believe so. i'm not aware of any of that. >> if you subsequently find, could you go back and let us know if that's the case if you
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did accept liability? >> i'll consult with counsel about that to, hopefully -- but i'm not aware of any computer hacking that you've talked about in the past. >> whether that's a yes or a no. >> would you like me to talk to them now, or can i write to you at some point in the future? >> we've got a bit of time, yes or no. >> where is -- they'd like to get back to you. if they did, they're not aware. >> a few weeks ago -- [inaudible] told me he would investigate allegations of computer hacking. has he started with you? >> no. he has oversight for the work of the management standards committee is doing, and i understand it's being pursued
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with vigor. >> are you aware that ian hearst has now had it confirmed that he's a victim of computer hacking? >> no, i'm not aware of that. >> and that 16 associated with him have had their e-mails read? >> i'll advise you, you are straying into areas -- >> okay, okay. this is about me. >> [inaudible] >> you may be aware or may not be aware given the line of questioning that operation -- [inaudible] contacted me last week to say that my name appeared on seized electronic advances, and they need more information to rule out me as a victim myself. are you aware of that? >> i have no knowledge of that. >> okay. um, i thank you for your apology on behalf of the company for the surveillance undertaken by derek webb. key bring to your attention a conversation i had with another senior member, former employee
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of news international on this matter? asked me to allow him to remain anonymous about the consequences. he said to me in registration to the original -- relation to the original inquiry of members of this committee, dig up, you know, as much information as you can on the members of the committee. do you know who might have sent out that dictate? >> no, i have no knowledge of that. >> he said to me about rebecca brooks, you might find this amusing, you might not. he said, she didn't like you at all -- that's me -- she took an absolute pathological dislike to you. she saw you as a person that was -- she saw you as the person that was threatening. did rebecca brooks discuss my line of inquiry on investigation with you? >> not that i recall, no. >> he went on to say to me, she tried to smear you as being mad. she was saying to blair, you've got to call this man off. he's mad. don't you realize he's mad?
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did you discuss the inquiry or do you know whether rebecca brooks discussed the inquiry with tony blair? >> i certainly had very little to do with the former prime minister, and i had no knowledge of discussions with him about this or other matters. >> okay. >> [inaudible] [inaudible conversations] >> well, okay let steve sinclair in, if we can just wrap up. >> did the lack of appropriate corporate golfer nance give a false sense of security that are news international was -- [inaudible] >> i don't quite understand your question. i don't think there's a -- i wouldn't say that there's a lack of appropriate corporate golfer nance. i think we had an instance here -- in. [inaudible] >> we've tried to strengthen a number of procedures, but, you know, from the governance
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perspective, there is, you know, we -- i wouldn't call it failure of governance. i think there's a failure in transparency. we had individuals who were not making transparent information that was relevant and could have been more consequential to a higher level and what i tried to do is strengthen some procedures around that to make sure there's more traction participant si there. >> i didn't want mention failure or -- >> my apologies. >> you said earlier you want today strengthen it so, obviously, there must have been some flaws in the corporate governance. is it not the case that you failed the show the agency or the will to deal with unethical practices because, quite frankly, successive chief executives since 1989 have believed they could do whatever they wanted and get away with it? >> i can't possibly speak to what chief executives in the past had believed what they could do and what they couldn't. i can say that as soon as evidence came to light to me,
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unequivocal evidence around wrong doing, this company has moved with determination and with vigor, um, to sort this out. and i think it's very, very important that the company takes responsibility for what happened with respect to liability with victims of illegal voicemail intercepts which the company did and i fully support as well as move to make whatever changes are necessary and pursue with vigor whatever allegations arise to make sure that people who are involved in wrongdoing are held to account and we aid the misto do that and, b, that we make sure to the extent at all possible that these things don't occur again. and i don't want think that there's been -- i don't think that there's been a, certainly not in my experience in the company that anyone can untouchable actually. what we want is a business and we want to be a business that is a business we aspire to be where
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we are doing the good work of serious journalism, of serious creative endeavor outside of the other businesses and that these things don't happen in the future. >> do you understand the significance that the data of 1989? is. >> pardon me? >> [inaudible] >> no -- >> do you understand the significance of the date i gave, which is 1989? >> i think i know where you're going. >> okay. do you want me to -- >> yes. well, are you referring to the hillsborough -- >> of course i am, absolutely. it's the case that the -- [inaudible] 1989 because that was when "the sun" newspaper published lies about the -- [inaudible] disaster under the banner headline and what the question i'd like to ask -- answer is the fact that "the sun" got away with telling outrageous lies in 1989 lead news international to
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believe they could do whatever they wanted without reproach? >> all i can say about that, and i'd like to say it clearly, is that, you know, i'd like to add my full apology to the wrong coverage of that affair. i'd lake to add that voice -- like to add that voice the chief executives of "the sun," i'd like to add my voice to that as well. it was wrong to do so. it was 22 years ago, and i was far away and a much younger person and, obviously, no involvement or really proximity to it, but i've since looked at it. i'm aware of the concerns and the hurt that it caused, and it's something that is something we're very sorry for, and i am as well. >> in the public interest -- [inaudible] >> certainly not. >> okay, then. you mentioned that a journalist at "the sun "had been arrested
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earlier. did employees commission phone hacks? >> it would be inappropriate for me to comment on any of the circumstances around what was provided by -- >> no individuals, just -- >> i shouldn't probably comment on the charges or anything like that either. i hope you understand. >> are you aware that the sun appeared in the evidence file of convicted -- [inaudible] glenn walker? >> i was not aware of that. >> okay. this particular publication is indicated in phone hacking, and if it's revealed that the sun does appear nor the file, will you close this paper like you did with "the news of the world"? >> i think it's important to not prejudge the outcome of any investigations, nor is it, i think, appropriate to prejudge what actions the company might
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take -- [inaudible conversations] >> pardon me? >> can you rule it out? is. >> i don't think i can rule any corporate reaction to behavior of wrongdoing out. that'll be a decision made at the time given whatever is out there. it's certainly -- i don't think it'd be right, but i think it's important not to prejudge any outcomes from these investigations that are important police investigations, and they're important internal investigations that we're proactively pursuing so make sure that our papers can be as good as they can be and that they continue to perform the important role that i believe they have in their commitments. >> thank you. [inaudible] >> mr. murdoch, you've now seen the opinion of -- [inaudible] if any employee had seen it according to your code of conduct within news corporation, should that have been reported, and to whom? >> i think, um, i'm not, i'm not
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aware of the requirement in the code of conduct with respect to legal counsel being received and who it must be shown to and not shown to. i would say that given the allegations or given the findings and the content of that opinion, it certainly would have been appropriate for it to be shown to more senior legal come in the company -- legal counsel in the company as well as away from "news of the world" as well as in full to me, for example, and others. >> okay. um, so far you've observed that you did not see the opinion and, certainly, not briefed on the full contents of that. >> that's correct. >> i cannot find any evidence that says mr. myler saw the opinion or was briefed on the full extent of it. but something's happened between 2008 when it's clear, certainly --
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[inaudible] because he was amending it. and also a strong suggestion that mr. crone certainly saw it. nobody else seems to be made aware specifically of certain allegations. however, 18 months later there is so much evidence that it is brought to the attention. so who brought it to your attention at the end of 2010, this whole business of si yen that miller and all the other -- [inaudible] was it tom crone that came forward? >> it was a matter -- no, first of all, there were a number of civil actions that were, um, that were following their process as it went through. and it was certainly in the second half of 2010 that the company -- and i was not at this point involved in the day-to-day management of the company. the company started to grapple with this. the company went and proactively requested both the police and
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the newspapers that were reporting this, i think it was refer today as a "drip, drip" of allegations of the evidence that they had. up until the end of 2010, the police still asserted that there was nothing new that they saw worthy of opening up a new information. but, certainly, the company and the management company decided that if evidence emerge inside the civil cases that was sufficient to warrant further investigations, that it would react on that. and the company did. i don't recall who came to me precisely to discuss that, but it was a matter of discussion amongst a number of senior executives at the end of 2010. >> could it have been -- so you said no to tom crone, could it been mr. myler or rebecca brooks? >> mrs. brooks was certainly involved in the, in those activities. she was running the company until the summer of 2011. >> just going back to the transcript of julian --
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[inaudible] on the 27th of may, it's already been read out largely by mr. watson. talks here about didn't believe culture in the newsroom, we've already had that discussion. how the investigation, were you made aware of the outcome of that investigation into those three individuals? >> i received throughout the period in 2009 onwards after the allegations came out in the newspaper, i received repeated assurances that internal investigations had been conducted, um, that they were thorough, that they concluded there was no evidence whatsoever of wider spread phone hacking, and this was something that was repeated, i know, to you, to this committee in 2009, and those are the same assurances that i was being given as well, also by the public statements, um, of the police at the time. >> um, further in that notice there's e-mail from members' staff, nothing is written about
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it. is it possible for you to give us some assurance or at least go away and make sure this happens that such evidence has been present today the police? is. >> certainly so. my understanding is that the police, first of all, cooperation with the police and providing them with everything that the company can as they require is paramount, and that's very, very important point to make. >> [inaudible] >> with respect to what the particular document he's referring to, i can't speculate what it is. >> no, i -- >> i isn't it is the evidence we've been discuss anything the this committee. >> yeah. although, unfortunately, julian did not make that specifically clear. however, just turning to financial governance, i think i discussed this with you in july. with the evidence you sent back to us, you talked about how the editor hat a 50,000-pound limit, but any cash payments required the editor. is that still the case, or are there alternative arrangements? >> actually, one of the changes we've made is significantly
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tightening up cash payment requirements to the extent that for a period of time they were banned in the company, and as the new chief executive and the management and standards committee work, work through that with the editors in terms of what sort of petty cash arrangements should be made, um, those things have been adjusted a little bit. but the cash payment terms are dramatically tightened up, and i think, um, are, you know, rare at this point if at all. and be i'd be very happy to send you the policies and guidelines that have changed as well as when the management and standards committee's recommendations are finalized after their investigations are complete, we intend to, you know, be very transparent with respect to both practices and a code of conduct with respect to journalistic practice, but also things like cash payments. >> well, building on that, sounds like you have made some changes, so it could be fair to now suggest that there is
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control perhaps on maximum amounts that be paid out by a certain person to a certain person -- >> very much so. >> -- provided the evidence back in july, i think, you suggested limits. >> i think right now there are very strict limits. i don't have them at my finger tips the exact number of those limits, but not only are there limits, but actually the number of people who can make cash payments and authorize them has been restricted dramatically. >> okay. thank you, mr. chairman. >> [inaudible] >> thank you very much. i've got, i want just to ask a final question on mr.-- [inaudible] and his legal costs of damages which i raised when we last met. just before that, chair, this whole inquiry is really about this committee being misled for, essentially, what news international knew, who knew it and when did they know it. as part of what you call an aggressive defend on the 28th of february in reaction to our
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record in "news of the world "editorials, tom watson was not called mad, he was called a top -- [inaudible] and i was a former journalist on the observer mainly pursuing an agenda for my powers of the left-wing rag. sadly, the victims here are you, the public. well, how true is that? um, but very quickly after that appeared, um, the next big settlement was with max clifford in march 2010. chair, this is a about what news international knew, who knew it and when they did. you were the executive chairman then, but rebecca brooks was the chief executive. were you involved in the, in the million pound settlement with max clifford in any way? >> i was not involved be the making of, with the arrangements with mr. clifford. i was informed of them, but in very general terms.
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but i was not involved in that, and at that point i was not running the business day-to-day. >> but you were the chairman. >> yes, i remained the chairman. >> did anyone come to you for the went fit of your experience in -- benefit of your experience in having settled the previous case? >> mrs. brooks did discuss the settlements or the arrangement with mr. clifford which was a commercial arrangement, i think, for services in the future, but not in any great detail. >> she didn't seek your authorization, did she seek your views? >> no. it was discussed with me in general terms but not with full day-to-day responsibility. she could make those judgments. >> and did you know who max clifford was? >> yes, i was aware who max clifford was. >> did you ask -- [inaudible] >> the question with mr. clifford, there had been a previous commercial areapgment some years earlier with
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mr. clifford, i was told, which was around publicity for the client or the like, and it was desirable to enter into an agreement like that for the future. that would be a good thing to do with mr. clifford, and with respect to any specifics about the litigation, it was just seen as rather you take a commercial arrangement with mr. clifford going forward which was in both parties' interest, and rather than have an acrimonious litigation, i wasn't -- >> i've got this australian voice rattling around in the back asking how, how much is this going to cost me now? and in the future? were those, those questions weren't asked by you at that sustaining? >> i think it's important to remember, and i believe this is the case that mr. clifford was, again, one of the original counts of voicemail interceptions that mr. moll care had been convicted of. so it wasn't at that point a new piece of wrongdoing or anything like that.
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and, in fact, i'm not aware of the details and ins and outs of that case one way or another. i simply wasn't involved in the legal strategy -- >> do you remember whether these four particulars of claim on the "news of the world "-- >> i wasn't involved -- >> i know it's confidential, but could you just confirm whether you did serve a claim or whether it was just a threat? >> i can discuss with counsel and come back to the committee whether or not that's appropriate or confidential. >> and do you know whether you went through the same process as with the, with the gordon taylor settlement of seeking outside opinion? >> i'm not aware. i wasn't involved directly -- [inaudible] >> could the company confirm whether that was a process and whether there is a qc's opinion? >> we can certainly write to the committee about what details are appropriate around mr. clifford. i'm happy to do that.
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>> just on the basis of what the company knew, who knew be it and when they knew it. um, would you consider a request from the committee that if there is a work -- qc's opinion no doubt checking with mr. clifford to preserve any personal detail, whether that might be released to us as the silverleaf opinions has already been released to us? is. >> i think in general, mr. farrelly, it's probably wise, um, not to go down the path of routinely waiving privilege on legal advice around matters of litigation, matters involving individuals, matters involving the company. um, that said, i'm happy to provide you -- i'll go back to come and to the company and say, you know, what can we, what can we provide with respect to details around the mr. clifford arrangements, and i'm happy to write to you on that basis, but i don't want to make any particular commitment -- >> we'll follow up in a let or. now finally, following our last
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session you -- mr. murdoch sr. said that, effectively, it was wrong to pay legal costs, particularly issuing an apology to the family whose phone he'd so cruelly hacked in the circumstances. you then came out and said that those legal costs were being stopped, but subsequently confirmed to us in a letter that any damages that are awarded against glenn mull care, the company will stand in good for. >> i think, and i'm not a lawyer, forgive me, mr. farrelly, but i think there are questions where with respect to him being a co-for the and were to be a case or a damage award against him that he was conducting work on the company behalf, then really the company's liable for those things, is my understanding.
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and, again, i can provide more detail on that if you like, but i think there's a legal point there. and i'm not a lawyer, but there's a legal point there that is -- >> i'm sorry -- >> -- worth noting. an agent on behalf of the business. >> if he's -- [inaudible conversations] >> thank you. >> if he is where he can't pay his costs and, therefore, he can't man his defense, if he is sued and the court just makes an award against him, that is an award the court make against him and not you because you will also be in the dark with the claim, and a separate award may be made against -- well, certainly, will no doubt be made against you. if you're backing him on any awards against him, we're back to where we were before the july committee. you effectively are making good an indemnity. is that right or wrong? >> i think, um, i don't want -- with respect, mr. farrelly, i
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don't think that's the right characterization. i think the word that i didn't, that i didn't want know but dr. coffee is right, this notion of vicarious liability is right. the matter of law and the courts and the question of paying for the defense is one thing. there's a question of the court awarding damages and the company being vicariously liable for those things is another. again, it seems like we're engaging in legal speculation -- >> i don't want, i'm sure you are engaged in legal speculation because i see your lawyer nodding in unison with you. but we're back in the position where you will be effectively supporting the man who hacked millie dowd's phone s. that right or wrong? >> i think your characterization, and i'm happy to come back -- i don't think your characterization of our supporting mr. mullcare is right. the management this committee has taken into review legal
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expenses of various people armed these matters, has taken a view to cease paying legal expenses as my father, when he testified to you in july, indicated. the question of what legal issues there are, in the event of future litigation, they are ones that i couldn't possibly comment on. >> okay, my final, final question on this, um, there are over 5,000 names that are now being looked at in the notebooks. any amount of whom might sue news international and glenn mullcare. what will be the test for news international as to whether they pay any awards? will it be just his word that somebody authorized, or will he have to satisfy a test, leap a hurdle to prove that, actually, there was authorization for the company for that particular hacking he did or whether it was
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just off his own back? will you discriminate between different cases in terms of standing behind mr. mullcare? is. >> the company has set up an independent process, i think as you're aware, mr. farrelly, to deal with civil cases coming through, and sir charles grey has an independent person, a former high court judge, as i you said it, is setting up a process to deal with claimants coming through. >> i'm talking about the courts, not charles grey's -- >> yes. so there's a number of test cases coming through over the next number of months, i believe, which will give, i think, the judge dealing with this a sense of what the damages number will be in these cases, what the ranges are. and then if company has admitted liability where legitimate claims are made, and this is a question of the independent management of these cases and the company to judge what claims are legitimate and what are not,
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um, with respect to voicemail interceptions and then the settlement procedure will then take its course. >> final question -- >> i'm not aware of -- >> should a case come to court and not be settled out of court, is it your position that in all circumstances no further questions asked you will pay any award made against glenn mullcare, or will you be more discriminate? >> i think every case has to be seen on its merits, and that's the -- and i think that's the appropriate way for the courts and the company to proceed. >> i think we have finished up. i thank you for your attendance. >> thank you, mr. chairman. cous
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ity. >> are hearing today is what the euro crisis means for taxpayers in u.s. economy. this is the first of two hearings. we have an additional one tomorrow at 9:30 a.m. in room. a representative from our
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central bank right downtown and one from treasury as well. tradition of this committee to read this. we exist to secure to fundamental principles. americans have a right to note that the money washington takes from them is well spent. americans deserve a government that works for them. our duty is to protect these rights. taxpayers have a right to know what they get from their government. we will work tirelessly and partner with what dogs to deliver facts and bring general reform. this is the mission of the government reform committee. i recognize myself now for five minutes for an opening statement. americans witnessed domestic and global markets deteriorate
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resulting in job losses and unprecedented measures to prop up financial institutions. as the economy remains vulnerable, the european union fights to fend off a second wave of turmoil. today's hearing examines economic unrest facing europe and international organizations. what first. as a great crisis spread throughout the eu. now dictates global headlines and the way european nations are categorized. the crisis began to take out head of european states and even managed to build the closest of relationships between president sarkozy of france and angela
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merkel of germany. the eu instituted the european financial facility. they're looking to address the solvency issue and the crisis facing european nations. it seems their actions have failed the desire. the great crisis transformed into a full-fledged e eurozone crisis, intensifying the contagion to the larger economy. today as leaders worked to strengthen the framework of the eu, they have become more dependent to use their balance sheet to rescue the global a economy. the central banks are not shying away from this. in effort to a european banks
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that had trouble accessing dollars, six banks led by the federal reserve board dollars to easier sovereign debt crisis. well welcomed by the markets, some have warned that the federal reserve is allowing the european central bank to create claims against the fed. it is important to recognize what the federal reserve determined as prevent exposure to the european central bank. it is prudent for the fed to review whether this president is using the incentives to sell underperforming assets during the intervening calm. would they have acted sooner if they could not rely on capital
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injection from the fed? another item is the role of the eurozone leaders in determining the conditions of credit default swaps and greek bonds. after they declared that holders would take voluntary pay cut, they were unable to serve the purpose. the sanctity of a contract is questions. such uncertainty may have long- term consequences as participants must factor in such risks to a greater degree. if we've learned anything from the last crisis, it is that impromptu presence by governments increases uncertainty and the likelihood of capital injections on behalf of taxpayers. in addition to market uncertainty, there reality --
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the reality is reducing lending due to under capitalization. the implications of the european economy are significant. a second recession would reduce exports and visibly influence the value of the u.s. dollar. the severity of these effects on the u.s. economy is anyone's guess. the only certainty is europe's crisis is not a global crisis. they are reinforcing the interconnectedness of the global economy, a they conduct a vigorous oversight on rescue proposals and threats to our economy and american jobs, a threat to the american people way of life, and the value of
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the currency they hold. simple question still need to be answered. are the actions consistent with the mandate? are the firms that are seeking liquidity illiquid or insolvent? i am interested to hear from our expert witnesses today about their views. i appreciate the panel. i now recognize the ranking member. >> thank you. trillions of years and that remain outstanding. this has imperiled the capacity of the governments to repay the debt thereby receiving a default.
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default by a major economy would have devastating consequences for the american taxpayer. we have over $1 trillion of dollars invested. we are exposed to nearly five trillion in potential losses. if they were to become insolvent, the ripple effect would be catastrophic. if europe sinks into a prolonged recession, and the small businesses will move out on valuable customers. retirement plans are invested in european assets. our economy would grow more slowly or slide into a recession. standards of living would decline. there are no questions at a healthy european economy is vital to the natural interest of the united states. we must protect the american
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taxpayer. i look forward to hearing testimony from our witnesses on what they see as the proper role of the u.s. government. europe must reform itself. countries like chilly and others need to address their short- term challenges. if this sounds like the pot calling the kettle black comedy would be right. the u.s. has failed to do a debt retention plan. europe's challenge is also political. what europe has the economic resources, it has failed to do so repeatedly. european leaders will have to surmount their political differences and agree that it'll require a shared sacrifice. it to be the tragedy of the spirit of cooperation founded on
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this crisis. it will be equally tragic if they were and able to come to an agreement. the government matters. they had made it harder to fulfill that mission. i joined my colleague in urging leaders to take the necessary steps to resolve the crisis and help restore the global economy to sustainable growth. the ranking you o member. we will now recognize the panel before us today. dr. desmond lachman, anthony sanders, mr. douglas j. elliot, dr. joshua rosner, mr. bert
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ely. i know at least four of you had testified before. it is standard practice that all witnesses be sworn. if you will please rise. do you solemnly swear that the testimony you give will be the truth, the whole truth, and nothing but the truth? you may be seated. let the record reflect that all the witnesses answered in affirmative. seen as you have testified before, if you will see the ones before you. this means what it means when you are at a stoplight.
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green means go. we will recognize mr. lachman for 5 minutes. >> thank you. forgive me to testify you. in my oral statement, i like to set up the reasons that there of the basic of again participation in the months ahead. it could resolve within the next 12 months. it really does have a sense of urgency. i do not like to care of the risks that they pose. the economic recovery should be
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an intensification of the crisis and lost to consider the various measures. they have been undertaken by the imf and fed reserve to diffuse the crisis. over the past few months, there has been a marked participation of europe. it suggests we can get this as early as 2012. this appears to be losing deposits. it is only a matter of time before they will get the hard defaults. this is not affecting year of -- italy and spain as too big to bail. should these problems intensify, the question would be
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there. the european debt crisis has a material impact on the european banking system which is in the throes of a credit crunch that is likely to intensify. we are seeing the german economy is showing signs of moving in recession. european policy makers in imf are hoping that country's in european periphery can correct their large public finance and external imbalances in several years of the fiscal austerity within the framework of a fixed exchange-rate system that does not allow them to devalue its. i very much doubt where this can work. they are likely to throw them into the deepest of recessions that will make the collection of
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taxes difficult. until have a political backlash. the european crisis could derail the united states recovery. we have already mentioned the idea that it could diminish u.s. export prospects and results in weakening of the euro. it to make it difficult for the third markets. the most important channel for which the european crisis could affect it would be duty -- would be through the united states. they got close to a trillion dollars deposited with european banks. united states banks are very exposed to germany and france. let me touch on the imf and the federal reserve. commitments to greece, ireland, and portugal are route $100 billion.
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-- are around $100 billion. this fits u.s. taxpayers at risk for the tune of $20 billion. it is of note that the imf has never lent money on this scale to any country in relation to the size of the countries as it does to greece, ireland, and portugal. the commitment to this is as much as 10% of their gdp. the recent european summit has european countries proposing to make bilateral loans to the tune of $260 billion that would be intended to loan to italy and spain. it is important to recognize that if those bilateral loans give them a claim on the imf as
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opposed to a claim on italy and spain, in the u.s. taxpayer would be put at risk for those loans. if italy and spain to have to go to the imf for large loans, the country's could be enormous. considering the combined commitment to italy and spain could well exceed the trillion dollars, we're talking about u.s. taxpayers they address for up to $200 billion. in assisting the potential risk , one has to consider that the risk of the on wrapping of the euro is a distinct possibility. were it to occur at in disorderly manner, it would have a devastating impact on the outlook. imf loans to the periphery could reach levels that should be on presidentially


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